Gas Market
UK gas prices strengthened on Thursday as peace negotiations over Ukraine faltered, and supply risks intensified. Winter-25 NBP rose 2.85p to 88.85p/therm, while Summer-26 gained 2.44p to 79.69p/therm, reversing the losses seen over the past two weeks. The rally was driven by mounting geopolitical tension, with Russia insisting on a veto over any proposed security guarantees for Ukraine and both Trump and Putin stepping back from trilateral peace talks. Moscow also launched an attack on a key gas compressor station in eastern Ukraine, critical for filling storage ahead of the winter heating season. In retaliation for months of such strikes, Ukraine has continued near-daily drone attacks on Russian oil refineries and pipelines. Additional support came from Gassco’s revised maintenance schedule, which introduced deeper capacity cuts for the remainder of August. This lifted near-curve and prompt contracts, with NBP Day-Ahead closing 2.50p higher at 82.70p/therm, its highest level since the end of July.
Power Market
GB baseload power prices climbed on Thursday in line with the gas market, as optimism around Ukraine-Russia peace talks faded. The front-month September contract gained £2.25, or 2.9%, to settle at £77.10/MWh. Spot prices were further supported by forecasts for low wind generation of just 2.4GW on Friday, with the Day-Ahead contract rising 4% to £83/MWh.
European carbon also firmed, tracking strength across the wider energy complex. The benchmark Dec-25 EUA contract rose €1.20 (1.9%) to close at €72.62/tonne, supported by a pick-up in trading activity, North Sea maintenance impact increases, and the deteriorating peace outlook in Ukraine.
Oil Market
Oil prices climbed on Thursday, with Brent and WTI reaching two-week highs, as geopolitical tensions escalated and U.S. data signalled robust demand. Brent crude settled 83 cents higher at $67.67/bbl, while U.S. WTI gained 81 cents to close at $63.52/bbl. The gains came after Russia and Ukraine accused each other of stalling peace talks. Moscow launched a major air attack near Ukraine’s border with the EU, while Kyiv is claimed to have struck a Russian oil refinery. Russia further dampened U.S. peace efforts by insisting on security guarantees that would give it an effective veto over Ukraine’s defence arrangements, an idea Ukraine dismissed as leaving it vulnerable to renewed aggression. Support also came from U.S. inventory data, which showed a sharp 6 million-barrel decline in crude stockpiles for the week ending August 15, far exceeding expectations for a 1.8 million-barrel draw, according to the Energy Information Administration.
Markets This Morning
Energy markets are holding steady today after Thursday’s gains, as the market awaits President Trump’s next move on the stalled Ukraine peace talks. Near-curve NBP gas contracts are up by an average of 0.06p/therm, while prompt prices are similarly muted. Day-Ahead fundamentals appear slightly bearish due to weaker gas-for-power demand, although the system is expected to tighten from August 27, when Norwegian continental shelf maintenance will require storage withdrawals and reduced exports. Brent crude is little changed, down just 12c at $67.55/bbl.
22 August 2025
